UNITED STATES SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 17295 / January 4, 2002

On November 27, 2001, Jose Manuel Diaz-Salin entered into a plea agreement with the United States Attorney for the Southern District of Texas (Houston Division), Criminal No. H-99-432, for one count of interstate transportation of stolen property in connection with violations of the antifraud provisions of the federal securities laws arising from an earlier-filed Commission action. Salin faces up to ten years in prison and a substantial fine.

Salin, age 59, was a resident of Houston, Texas, and Las Vegas, Nevada, during the course of the scheme.

On December 10, 2001, the Honorable Nancy Atlas, United States District Judge, Southern District of Texas (Houston Division), Criminal No. H-99-741, sentenced Frank Bravo, Jr. to 60 months in prison, followed by three years of probation, in connection with violations of the antifraud provisions of the federal securities laws arising from the same earlier-filed Commission action. Bravo was further ordered to pay $4,908,571 as restitution to his victims.

Bravo, age 46, was a resident of Santa Ana, California, during the course of the scheme.

The indictments against Salin and Bravo alleged that they made material misrepresentations and omissions to the public to encourage investments in Insnet World Communications, Inc. Many of the investors were elderly and used their retirement funds to invest in the Insnet program.

The Commission filed its civil lawsuit against Insnet, Salin, Bravo and others on July 28, 1997, seeking a temporary restraining order, asset freeze and other emergency relief. According to the Commission's complaint, Salin and Bravo offered and sold approximately $4.8 million of unregistered securities in the form of promissory notes to investors in numerous states. Investors were told that their investments would be used to purchase long distance telephone time from major satellite suppliers to be resold to the public for a profit through long distance telephone calling cards. However, Salin and Bravo used investor funds for their own benefit and to pay interest payments to earlier investors in an undisclosed "Ponzi" scheme. Shortly after the SEC filed its lawsuit, Salin fled to Spain and later to Switzerland, where he was arrested on March 8, 2001, and extradited to Houston.

On June 28, 1999, default judgments were entered against Salin and Bravo in the Commission's action permanently enjoining them from future violations of the antifraud and registration provisions of the federal securities laws. Additionally, Bravo was ordered to disgorge $863,489 and pay a civil penalty of $100,000. Salin was ordered to pay $1,386,473 in disgorgement and a $100,000 civil penalty.